Nickel yesterday traded with the positive node and settled 0.01% up at 920.1tracking LME nickel prices overnight opened at USD 17,160/mt, with the high end USD 17,250/mt, finding support at USD 17,005/mt. Finally, LME nickel prices closed at USD 17,115/mt, down USD 65/mt. Domestic PPI released last Friday was disappointing, but falling CPI indicated inflation is curbed, causing speculations of deposit reserve ratio cut to grow. In this context, LME nickel prices fluctuated and rose slightly. China's central bank announced May 12th it will lower deposit reserve ratio for financial institutions starting May 18th by 0.5 percentage points, the second decrease this year. Deposit reserve ratio for large financial institutions will be 20.0% after adjustments, with 16.5% at small financial institutions. The Central Bank lowered deposit reserve ratio on February 24th 2012 last time, and it unexpectedly cut deposit reserve ratio given sluggish domestic and oversea demand and weak domestic production, combined with reducing expectations of QE3 implementation and improving European debt crisis, so as to ease cash flow problems in the market and maintain steady economic growth. Support also came as Vale, the world's second-biggest nickel producer, said on Thursday it would suspend sales and purchase agreements at its Goro project on the French Pacific island of New Caledonia after an accident at the mine's sulfuric acid plant. For today's session market is looking to take support at 918.7, a break below could see a test of 917.3 and where as resistance is now likely to be seen at 921.2, a move above could see prices testing 922.3.

Trading Ideas:

Nickel trading range for the day is 917.3-922.

Nickel settled 0.01% up tracking LME nickel prices after data showed domestic PPI released was disappointing

Deposit reserve ratio for large financial institutions will be 20.0% after adjustments, with 16.5% at small financial institutions

The Central Bank lowered deposit reserve ratio on February 24th 2012 last time, and it unexpectedly cut deposit reserve ratio